Cryptocurrency explained

Jesse Cranney explains the world of BitCoins, LiteCoins and DogeCoins – cryptocurrency.

So you may have heard of Silk Road, one of the most popular underground websites famous for being the eBay or Gumtree of all things illegal. Anything from cocaine to hitmen can be purchased on underground websites.

Since no one is willing to put their name on the receipt for a small firearm travelling through the postal system, a need emerged for a secure, anonymous currency. Introduce the cryptocurrency revolution.

A cryptocurrency is similar to a commodity, in that each unit of the cryptocurrency is unique by definition and therefore irreproducible.

Most people have heard of BitCoins, and quite frankly are probably sick of hearing about them.

A single BitCoin is a string of letters and numbers that suit a specific requirement. The string is long enough so that the only realistic way to find an appropriate combination of letters and numbers is by letting a computer slowly work away at a ‘block’. This is similar to digging up precious minerals, so early on in the piece the process was coined ‘mining’.

A single BitCoin in 2009 would cost you a little less than a tenth of a cent, and at the time of writing this, one BitCoin was worth $489.7 AU.

In the same way that the value of gold fluctuates, so does the value of any popular cryptocurrency.

A single BitCoin in 2009 would cost you a little less than a tenth of a cent, and at the time of writing, one BitCoin was worth $489.7 AU.

There are plenty of stories floating around about lucky investors getting rich accidentally by this boom.

One such goes as follows: Man buys $27 worth of BitCoin, forgets about them, and sells them four years later for more than $800,000. Hindsight is a hell of thing…

Now, with these get-rich-quick thoughts in the head of every man and his dog, new cryptocurrencies are emerging faster than can be tracked.

BitCoin is still arguably the most famous, with online shops to some real estate agents accepting them as a valid currency, however creeping up is the LiteCoin, today valued at $12.41 each, and the internet meme based DogeCoin [pictured], costing less than 49 cents for a thousand units.

DogeCoin is probably the most fun to talk about since it is at a value comparable to BitCoin was before it grew, seeding the thought, “What if?”

In the last 60 minutes on one website alone, more than 500,000 DogeCoins were traded, presumably with the retrospection of the BitCoin explosion fuelling the gambles.

Some predictions have been thrown around, stating that a single DogeCoin should be worth no less than 13 cents by 2016, however the truth of the matter is that nobody actually knows what will happen here.

The thought of tossing away $50 dollars today to potentially have found $13,000 in two years time has definitely caught the attention of some.